AN explosive dossier submitted to Industry and Commerce minister Sekai Nzenza casting light on circumstances relating to the ongoing shareholding wrangle in Caps Manufacturing pitting Fredrick Mutanda and government, strongly recommends that the businessman be “charged with fraud without delay”, the Zimbabwe Independent can reveal.
According to a document titled: “Brief on Fraudulent Activity Caps Pvt Ltd,” generated internally by the Industry and Commerce ministry, lays bare a historical account of how government snapped a 67,52% stake in Caps Manufacturing from the Fred Mutanda Trust for US$45 million in 2016.
The Reserve Bank of Zimbabwe (RBZ) on behalf of government, concluded the agreement, which has now turned into a legal dispute, with Mutanda, representing his family trust.
Ensuing events after finalisation of the transaction, as the documents gleaned by the Independent show, subsequently triggered a dispute between government and Mutanda. This, as the dossier shows, was after government proceeded to appoint a board, which was charged with running the affairs of the now state-controlled company.
However, on December 6 2020, an entity called Caps Pharmaceuticals Trust, “lodged an urgent application in the High Court against the government and the board member appointees,” excerpts from the internal document read.
Concerns that government had no “authority” to nominate a board to run the affairs of the company, as the document reveals, sat at the heart of the trust’s arguments submitted before the High Court.
At the time the internal document was prepared, the Industry and Commerce ministry made analytical observations showing that government had legally acquired controlling equity in Caps Private Limited and its related businesses, among others.
“There is an existing valid Sale of Shares Agreement between the government of Zimbabwe, through the Reserve Bank of Zimbabwe (RBZ) and Fred Mutanda Trust, represented by Fredrick Mutanda through which government acquired majority shareholding of 67,52% in Caps Pvt Limited and other related entities.
“Furthermore, it is apparent that there was no evaluation of companies which was conducted prior to the procurement of the government shareholding in Caps Private Limited,” the dossier reads.
Prior to finalisation of the transaction, the document suggests that Mutanda was, “prepaid US$21 million”.
In essence, the dossier highlights that, “what is apparent from all accounts is that there was no proper due diligence which was conducted before the conclusion of the transaction.
“How the value of the collection of Caps entities, including Caps Private Limited, fell squarely in the purview of US$45 million, with US$21 million advanced ahead of the execution of the agreement is a question which remains to be answered.”
In the final analysis, the report recommends that Mutanda, alongside government officials who presided over the contentious transaction must be brought to book.
“Mutanda and members of the Caps Pharmaceuticals Trusts must be arrested and charged without delay. The trustees are complicit in Mutanda’s attempt to defraud the government,” it states.
“For failure to conduct due diligence and proper evaluation, government officials who handled the transaction between Mutanda and RBZ are liable for negligence in line with Section 174(1) of the Criminal Law.”
Fraud charges, the report further states, should also be slapped against members of the interim board who chose to remain silent about the fraudulent transaction and did not disclose knowledge of the existence of Caps Pharmaceuticals Trust.
“To the extent of their inaction and non-communication, members of the interim board, who were made aware of the existence of the Caps Pharmaceuticals Trust and its purported 51% shareholding in Caps Private Limited must be subjected criminal charges under Section 174(1) of the Criminal Law (Codification and Reform Act,” the document recommends in its conclusion.
Repeated efforts to get a comment from Mutanda were fruitless.
Source link : https://www.theindependent.co.zw/local-news/article/200000896/govt-lobbies-mutanda-arrest-over-caps-saga
Publish date : 2022-09-23 08:38:52